Gallego Rejects GOP’s Crypto Ethics Draft, Preps Tillis Counteroffer

Sen. Ruben Gallego called the White House’s crypto ethics counteroffer a “piece of shit” this week, and he is already drafting a replacement with an unlikely partner: Republican Sen. Thom Tillis of North Carolina. The fight is holding up the Clarity Act, a bill meant to give the digital asset industry the federal rulebook it has wanted for years.

Strip away the profanity and the dispute comes down to one mechanical question. Who gets to sue a president who made more than $1.4 billion from crypto last year if he breaks the ethics rules written to restrain him? Republicans say only the Justice Department he appoints. Democrats say that is no check at all.

Gallego Rejects the White House-Backed Draft

The Arizona Democrat did not mince words about the GOP’s latest offer. “Whatever piece of shit they sent back to us, that was not a serious effort,” Gallego said in an interview Thursday.

I can’t imagine that that’s a serious effort, after all the work that we’ve done with our Republican colleagues, that they would take the months and months of work and somehow interpret that and turn around and think what they offered was even remotely close.

Gallego, an Arizona Democrat, spent months negotiating an ethics provision alongside Sens. Cynthia Lummis of Wyoming and Bernie Moreno of Ohio and the White House before those talks collapsed. He is now working with Tillis, a North Carolina Republican, and what he calls “other Republicans that are not being named right now” on a counteroffer.

Lummis, the bill’s lead sponsor, defended the language her side sent back. “President Trump is supporting the most robust ethics rules ever imposed on the office of the presidency, choosing a higher standard than the law required of him and truly putting America first,” she said in a statement.

Who Gets to Police Trump’s Crypto Empire?

The White House-approved text would bar the president, vice president, members of Congress and senior executive branch officials, along with their spouses, from issuing or sponsoring new digital assets while in office. It would also give Trump a year to move his existing crypto holdings into a blind trust. The catch is who enforces any of it.

The draft names the U.S. attorney general as the sole enforcement authority and explicitly blocks state attorneys general and private parties from bringing their own cases, according to a summary of the 616-page merged Senate text. Senate Banking Committee Democratic staff, working for ranking member Elizabeth Warren, reviewed the language and found provisions riddled with major loopholes that would not stop the president from collecting his next big crypto payday.

Here is what the current draft would and would not do, based on the text circulated this week:

• Bans new issuance – officials and spouses could not launch or sponsor new tokens while serving
• Leaves existing holdings alone – it does not force divestment of crypto already owned
• Blind trust window – gives a year to move holdings into a trust rather than requiring an immediate sale
• DOJ-only enforcement – state attorneys general and private citizens are barred from suing
• A 2029 sunset – the restrictions expire on the next inauguration day, Jan. 20, 2029

Sen. Angela Alsobrooks of Maryland called handing that power to the Justice Department “wild and unserious and stone crazy.” Speaking at a Semafor conference, she said, “Look at this Department of Justice. They’re completely unserious, first of all, and it’s just stone crazy to rely on them for anything.”

Where the two sides land depends entirely on who they trust to hold the line.

• Lummis and Senate Republicans say letting state attorneys general sue was a “bright red line,” since the White House has already faced multiple suits from state prosecutors and does not want to open officials to what they call politically motivated cases
• Alsobrooks and Senate Democrats say DOJ cannot be trusted alone, pointing to what they call the department’s “inability and unwillingness to enforce the law”
• Warren’s committee staff argue Trump could simply ignore the rules because he “handpicked” the attorney general meant to enforce them against him

The $1.4 Billion Backdrop

The dollar figures explain the standoff. Trump’s 2025 financial disclosure, released by the Office of Government Ethics, showed crypto as his single largest income source, and the numbers dwarf anything his real estate business produced in a comparable stretch.

Taken together, Trump reported earning more than $1.4 billion from crypto in 2025, roughly two-thirds of his overall income for the year. Asked about the criticism, Trump told reporters, “You know why I’m profiting, because the stock market’s going up, everybody’s profiting.”

Crypto is not the only part of the Trump family’s brand that has turned into a fee stream under scrutiny. A $100,000 fee for access to Truth Social trading data drew its own comparisons to a decade-old Wall Street scandal earlier this year, part of a broader pattern of the president’s businesses monetizing his time in office.

Democratic Attorneys General Have Already Beaten Trump in Court

Lummis was candid about why Republicans drew the line where they did. State attorneys general being able to bring criminal or private cases was a “bright red line” for GOP negotiators, she told CoinDesk, “for a lot of U.S. senators who did not want to subject themselves to being sued by a different state attorney general.”

“That was also true of the White House, which has been subject to multiple lawsuits and prosecutions by state attorneys general,” Lummis added, “and so that’s kind of a bright line issue for a lot of senators, and certainly for the White House.”

That history is not abstract. Democratic attorneys general filed their 100th lawsuit against the Trump administration this year, part of a coordinated legal strategy across more than 20 states, and they have won a majority of the cases that have been resolved so far. The pace is unlike anything either party has produced against a president before.

Republicans, for their part, argue a single federal standard beats what they call a patchwork of state interpretations driven by political priorities. Democrats counter that the same prosecutors who have already beaten the administration in court are precisely the check a self-interested enforcement design needs.

Tillis Wants One More Conversation With the White House

Tillis was more measured than Gallego about the GOP proposal but still acknowledged it is not finished business. “The baseline, I think, falls short of what some of the Democrats want,” he told reporters Thursday, adding that the White House-approved language “was good” on its own terms.

Republicans hold 53 Senate seats, so the bill needs at least seven Democrats to clear the 60-vote threshold. Seven Senate Democrats, including Alsobrooks, who had earlier voted to advance the bill out of committee, signed a joint statement this week saying the current draft “falls short.”

“We have to have one final discussion with the White House to see if a couple of other things that look reasonable to me are acceptable to the president,” Tillis said.

Thune Casts Doubt on an August Deadline

Senate Republicans had hoped to hold a floor vote before lawmakers leave for the August recess. Majority Leader John Thune sounded skeptical Thursday that both the Clarity Act and a separate college sports bill could get done in time.

“I don’t think we’ll be able to get them done,” Thune told reporters. “I would like to at least get Clarity started. We’ll see where the votes are.”

Gallego is not backing off. “We are still in this fight,” he said. “We are going to send back language.”

Frequently Asked Questions

What Does the Clarity Act Actually Do?

The Clarity Act would build a federal regulatory framework for digital assets, dividing oversight of crypto markets between the Securities and Exchange Commission and the Commodity Futures Trading Commission. The current version is a merged 616-page draft combining work from the Senate Agriculture and Banking committees, covering everything from exchange rules to stablecoins, with the ethics section as its last unresolved piece.

Would Trump Have to Stop Owning Crypto?

No. The draft does not force him or any other covered official to sell existing holdings, only to stop issuing or sponsoring new digital assets while in office and to move current holdings into a blind trust within a year. The text also includes a clause letting issuers keep using an official’s name or likeness on tokens that existed before that person took office, so ventures like the TRUMP memecoin would not be retroactively affected.

Which Democrats Have Said the Bill Falls Short?

Seven Senate Democrats signed a joint statement this week rejecting the current draft, among them Sen. Angela Alsobrooks of Maryland, who had voted to advance an earlier version of the bill out of committee before pulling her support over the ethics language.

When Could the Senate Vote on the Bill?

Republicans wanted a floor vote before the August recess, but Thune has cast doubt on that timeline, and the bill is competing for floor time with separate college sports legislation. Lummis has said the ethics section specifically was expected to keep being negotiated through the weekend following the July 22 draft’s release.